an idea that had begun to take hold well before voting began. In February, Te Conference Board described the 2024 proxy
S
season as having a “‘scattershot’ feel to it.” Meanwhile, a corpo- rate governance expert predicted in Forbes in February that the coming proxy season would be “anything but typical, largely due to the intense and divisive social, political and environment we all live in.” Another reason why the 2024 proxy season is hard to pigeon-
hole is that investors and directors each had very different sets of priorities. In a recent survey, EY discovered directors in the Americas were focusing on economic conditions, capital alloca- tion, cybersecurity and data privacy. Investors, on the other hand, were paying keen attention
to the talent agenda (63%), climate change and environmental stewardship (56%), and supply chain matters and capital alloca- tion (both at 31%). If 2024 goes down in proxy history for its lack of cohesiveness,
some trends from earlier years held steady or intensified. For in- stance, 2024 broke the record for the most shareholder proposals ever filed, beating out 2023, another record-setter in this regard. In addition, as has been true for many years, the vast majority (76.1%) of known shareholder proposals continued to be aimed at larger companies, specifically those in the S&P 500. In 2023, Amazon had the dubious distinction of again receiving the highest number of shareholder proposals (18) of any public company, down slightly from 21 last year. Below are more highlights of this hard-to-categorize 2024 proxy season as it winds down.
Universal Proxies and Big Management Wins? Two of the highest-profile proxy fights of the 2024 season—at Te Walt Disney Company and at Norfolk Southern—ended with management staving off dissident threats. Management at Norfolk Southern, which was prominently linked to a 2023 Ohio chemical disaster after a train derailment, faced a board challenge from activist investor Ancora Holdings. Ancora sought to take control of Norfolk Southern’s 13-person board by nominating a slate of seven of its own candidates. Proxy advisor Glass Lewis endorsed six of the seven nominees, while ISS endorsed five. Te May 9 vote brought changes for Norfolk Southern but
ome proxy seasons lend themselves to bold thematic headlines. Others are more a grab bag of initiatives with a few trends gaining momentum and other trends showing signs of a quick fade. Te 2024 proxy season falls into the latter camp—
nothing cataclysmic. After the vote, Alan Shaw remained as CEO in spite of Ancora’s efforts to oust him; and while Ancora gained three board seats, this was not enough to alter the balance of control in the boardroom. At Te Walt Disney Company, activist Nelson Peltz also ran
a high-profile campaign to gain influence by winning two board seats but he, too, proved unsuccessful at the April 3 vote. In April, the New York Times attributed the win by Te Walt Disney Company’s management to CEO Bob Iger’s blunting Peltz’s change agenda by proactively mapping out and communicating a series of bold initiatives, including cost-cutting efforts. Tat so few dissident nominees were elected to boardrooms
is “perhaps the most notable trend emerging from proxy contests in 2024,” according to a June 15 post by the Harvard Law School Forum on Corporate Governance. One factor favoring Iger and other CEOs in 2024, according to
Harvard, was the Securities and Exchange Commission’s (SEC’s) new rule requiring the use of a universal proxy card. In 2022, the SEC changed a longstanding rule so that com- panies would now send shareholders a single proxy card listing all board nominees, including those nominated by dissidents so long as they complied with nomination procedures. Te single or “universal” proxy card allows shareholders to mix and match votes for directors rather than being forced to choose between management’s slate and the full slate of nominees proposed by dissidents. In a March 12 proxy season preview, ISS noted that “contrary
to predictions,” universal proxy cards had limited impact in 2023. Last year, there was no wave of contested elections and dissidents did not score a number of dramatic wins even with the SEC’s new rules. Even just a few months ago, however, ISS hadn’t ruled out the possibility that the 2024 proxy season could be shaken up by the universal proxy. Now that the results from the 2024 proxy season are in, experts
are reaching a surprising conclusion: the universal proxy is not immediately proving to be a boon for shareholder activists. As was written in a June 6 post on Harvard Law School’s Corpo-
rate Governance Forum, “the early stages of the 2024 proxy season have been marked by outright company successes at the ballot box—results which run contrary to the tidal wave of predictions concerning the ease with which shareholders would obtain at least partial victories through the use of universal proxy cards.”
Backlash Proposals: The Latest in E&S After enormous excitement (or foreboding) a few years back when environmental and social (E&S) proposals began gaining momen-
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